Former Accountant at Defense Contractor Sentenced For Bank Fraud

Stole Over $1.4 Million from His Company During 12 Years

June 27, 2008

Baltimore, Maryland - U.S. District Judge J. Frederick Motz sentenced William A. Armstrong, age 51, of Timonium, Maryland, today to 18 months in prison followed by five years of supervised release for bank fraud in connection with the theft of over $1.4 million from his employer, a company that contracted with the U.S. Navy to produce unmanned air vehicles known as “drones,” announced United States Attorney for the District of Maryland Rod J. Rosenstein. Judge Motz also ordered Armstrong to pay $1,468,475 in restitution.

According to his plea agreement, Armstrong was an accountant from 1992 to September 2007 at a company which was the government’s prime contractor for the production of drones. He processed and paid vendor invoices and other bills, charging costs to the company’s government contracts and overseeing the company’s accounting and banking system. In September 2007 the company’s chief financial officer detected a $17,051 check made payable to Armstrong, who could not provide any justification for receiving the check. A subsequent audit by the company uncovered Armstrong’s embezzlements which occurred from 1996 to 2007 under two schemes.

First, from about 1996 through May 2001, Armstrong wrote checks to himself in nominal amounts, and recorded reimbursements for cash outlays by him for the purchase of an item of modest value. For example, a check stub dated April 20, 2001 reflects a $5 check to Armstrong. Armstrong then altered the amount payable from $5 to $9,005 and deposited the check in his personal bank account.

Second, after a change in the company’s record keeping, Armstrong wrote checks in large amounts to himself, forged the signatures of company officials who had signature authority and deposited the checks into his personal bank account. In the company’s computerized accounting records to which he had complete access, Armstrong accurately recorded the amount of the check, but changed the identity of the payee from himself to the name of a vendor who routinely provided goods and services to the company.

From 1996 to 2007 Armstrong stole from $31,000 to $222,010 each year, for a total of $1,468,475.

United States Attorney Rod J. Rosenstein praised the Defense Criminal Investigative Service for its investigative work and thanked Assistant U.S. Attorney Stephen M. Schenning, who prosecuted the case.



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